Bulls retaliate back on Euro-zone bailout deal; Sensex reclaims 17,600 mark

After witnessing steep fall in previous session, bulls retaliated back on Tuesday with Indian bourses hitting fourteen week high following firm European cues. Moreover, expectations that leading companies may report encouraging first quarter numbers helped the local benchmarks to snap the day’s trade with a massive gain of over a percentage point. Though, benchmarks, after a decent opening, traded range bound for most part of the day’s trade as they constantly faced resistance near 17,500 (Sensex) and 5,300 (Nifty) levels. However, cues from the Asian markets remained subdued as most of the regional peers ended the session in the negative terrain as China’s imports grew less than estimated in June while export growth slowed, suggesting slowing economy. Chinese imports rose 6.3 percent in June from a year ago, less than half the forecast of a 12.7 percent rise, while exports grew 11.3 percent y-o-y, faster than expectations for a 9.9 percent increase.

Domestic benchmarks picked up pace in last leg of trade and surpassed their crucial 5,300 (Nifty) and 17,600 (Sensex) levels following turnaround in European counters, which were trading firm at this point of time after a cautious start. The euro zone ministers agreed to grant Spain an extra year until 2014 to reach its deficit reduction targets and set the parameters of an aid package for Madrid's ailing banks.

Back home, investors continued to take positions in metal stocks and scrips like Hindalco, Sesa Goa and Jindal steel rose 2-3 percent. US aluminum giant Alcoa reported Q2 June 2012 earnings and revenue that beat market expectation after an increase in orders from the auto and aerospace industries. Moreover, share of tyre manufacturer edged higher after international rubber prices tumbled on worries over the sluggish global economy. Shares of MRF, Falcon Tyres, Apollo Tyres, CEAT and JK Tyre & Industries edged higher in the trade.

On the BSE sectoral space, defensive FMCG counter, which remained the lone loser till first half, turned out to be the major gainer in the end on report that monsoon, which came late, seems to be advancing gradually to cover most parts of the country. The meteorological department officials predicted that medium rainfall will continue for the coming two to three days all over the city. Moreover, auto stocks too cheered the sentiments after data showed total vehicles sales in India across all categories rose 9.05 percent to 14.85 lakh units in June 2012 from 13.62 lakh units in June 2011.

The NSE's 50-share broadly followed index Nifty, added decent gains to settle near its psychological 5,350 support level while Bombay Stock Exchange's Sensitive Index - Sensex rose over two hundred points to finish above the crucial 17,600 mark. Moreover, the broader markets too settled on a positive note with the Mid Cap index traded in line with its larger peers as it closed with gains of over a percent.

Meanwhile, the markets rose on weak overall volumes of over Rs 1.31 lakh crore while the turnover for NSE F&O segment remained on the higher side as compared to that on Monday at over Rs 1.00 lakh crore.

The BSE Sensex surged 226.37 points or 1.30% to settle at 17,618.35, while the S&P CNX Nifty soared by 70.20 points or 1.33% to close at 5,345.35.

The BSE Sensex touched a high and a low of 17,631.19 and 17,424.29 respectively. The BSE Mid cap index was up by 1.10% and Small cap index added 0.81%.

Hindalco up 2.74%, Maruti Suzuki up 2.72%, ITC up 2.71%, Tata Motors up 2.58% and Sterlite Industries up 2.46% were the major gainers on the Sensex, while Wipro down 0.36% and NTPC down 0.03% were top losers on the index.

The top gainers on the BSE sectoral space were Consumer Goods up 1.75%, FMCG up 1.75%, Auto 1.62%, Bankex up 1.54% and Metal up 1.48%, while there was no loser on the BSE sectoral space. 

Meanwhile, the domestic car sales has expanded by 8.28 percent to 1,55,763 units in June as against 1,43,851 units in the same month last year while, the sales of trucks and buses rose 4.7 percent in June to 64,926 vehicles.

Motorcycle sales grew 6.58 percent during the month to 879,713 units from 825,388 units in the same month last year while, total two-wheeler sales in June this year 9.2 percent to 1,169,733 units from 1,071,161 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (SIAM).

Meanwhile, sales of commercial vehicles grew 4.71 percent to 64,926 units in June from 62,007 units in the year-ago period.

Overall domestic sales of automobiles across categories in June 2012 was 14,85,744 vehicles as against 13,62,495 in June 2011, indicating an increase of 9.05 percent year on year.

The S&P CNX Nifty touched a high and low 5,348.55 and 5,284.55 respectively.

The top gainers on the Nifty were Axis Bank up 4.07%, JP Associates up 3.48%, Reliance Infra up 3.09%, PNB up 2.94% and Bank of Baroda up 2.84%. On the flipside, ACC down 0.89% and Wipro down 0.41% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up 1.30%, Germany's DAX up 1.52% and United Kingdom’s FTSE 100 up 1.00%.

Most of the Asian markets fell on Tuesday after reports released which showed that Chinese imports grew about half the pace as economist expected, this indicated that China which is regarded as the World's second biggest economy is gradually slowing down. In the morning session its stocks rose due to Europe's finance chief made progress on Spain bailout but later gave away all its gains.

The world’s largest miner BHP Billiton erased its profits after imports to China increased about half the pace. China Yurun Food Group lost 6.6 percent after its chairman resigned. Shares of Nikkei 225 fell for the fourth consecutive session erasing morning gain after release of weaker Chinese import data showing concerns of slowing demand for second biggest economy. Hang Seng index closed on Tuesday on a light volume as investors were not so much interested in trading, on concern of Chinese economic growth. Kospi Composite continued slide for the three consecutive sessions on Tuesday as foreign investors kept on dumping their stocks due to global economic slowdown. Early in the trade Kospi Composite started on bullish note over undervaluation of local stock market but in the afternoon it turned into bearish phase on worries about global economic slowdown.